SAN ANTONIO--(BUSINESS WIRE)--AiAdvertising, Inc. (OTC: AIAD), a next-generation AdTech company focused on harnessing the power of artificial intelligence (AI) and machine learning (ML) for today's marketing leaders, has reported its financial and operational results for the first quarter ended March 31, 2023.
Key First Quarter and Subsequent 2023 Highlights and Business Update
- Revenue for Q1 2023 was $2.2 million, an increase of 81% from $1.2 million in Q1 2022
- Platform License revenues for the quarter ended March 31, 2023, increased by 157% to $0.1 million.
- Digital Marketing revenues for the quarter ended March 31, 2023, increased by 107% to $1.8 million.
- Net Loss for the quarter ended March 31, 2023 decreased by 66% to ($0.9) million.
- Net Cash used in the quarter ended March 31, 2023 was $0.6 million, down 263% from cash used of $1.6 million a year ago.
- Received a $5.0 million equity investment to fuel the next phase of growth, including further development of AiAdvertising’s Campaign Performance Platform and to create a new focus area serving customers valuing founding American principles.
- Appointed independent directors James B. Renacci, with more than 30 years of experience in leadership of multiple businesses, and Thomas O. Hicks, Jr., bringing valuable experience and insights into technology, finance and the capital markets, to the Board of Directors.
- John C. Small joined the Company as Chief Financial Officer, bringing over 30 years of financial experience with a focus on strategy & operations, mergers & acquisitions, business development, and raising capital.
- Became one of the first to integrate ChatGPT’s commercial applications in AdTech, leveraging its PersonaAI signals and insights to power automated ChatGPT, enabling the PersonaAI to become more informative and more targeted.
Management Commentary
“Overall, this was a fairly good quarter for us as we saw improvement across all of our key operating metrics,” said Jerry Hug, Chairman and CEO of AiAdvertising. “The first quarter of 2023 saw continued client momentum led by our proprietary, patent-pending, Campaign Performance Platform (CPP) which harnesses AI to increase productivity, efficiency, and performance of advertising campaigns.
“Our focus remains on positioning AiAdvertising as an innovative leader in applying AI and ML technologies to marketing and advertising solutions to deliver superior results to our clients. Our CPP is attracting significant interest from direct-to-consumer brands that are looking to deploy large budgets at scale without having to add headcount. Our AI-powered AdTech software and optimization services are enabling our clients to eliminate guesswork, inform creative direction, and prove performance.
“During the first quarter we strengthened our management and board with several veteran executives. We welcomed John Small as our Chief Financial Officer, a C-Suite executive and capital markets industry veteran who will oversee our finances as we enter the next phase of growth. We also appointed independent directors James B. Renacci and Thomas O. Hicks, Jr. to the Board of Directors. James is an experienced businesses executive who we anticipate will help us expand the breadth and depth of our reach as a company, positioning us to scale our platform. Thomas brings valuable experience and insights into technology, finance and the capital markets and will assist in delivering additional technology services and strategic relationships to a growing trend of businesses nationwide that embrace foundational American values and self-governance principles such as freedom, faith, and equality.
“Looking ahead to the second half of 2023, with our recent strategic investment of $5.0 million from Hexagon Partners, we are furthering developing CPP and creating a new focus to serve customers valuing founding American principles. We continue to build on the potential of our revolutionary Campaign Performance Platform to deliver superior results to our clients, that we believe will in turn bring long-term value for our shareholders,” concluded Hug.
First Quarter 2023 Financial Results
Revenue for the quarter ended March 31, 2023, and 2022 was $2.2 million and $1.2, respectively, an increase of 81%. The increase was primarily due to strong client activity in Digital Marketing and Platform license revenue. The Platform License segment revenues for the quarter ended March 31, 2023, increased by 157% to $0.1 million from the prior year. Digital Marketing revenues for the quarter ended March 31, 2023, increased 107% to $1.8 million.
Total operating expenses for the quarter ended March 31, 2023, were $1.4 million, compared to $2.3 million in the prior year.
Operating activities for continuing operations used $0.6 million in net cash for the quarter ended March 31, 2023, compared to $1.6 million for the quarter ended March 31, 2022.
Net loss for the quarter ended March 31, 2023, was $0.9 million, as compared to a net loss of $2.6 million in 2022. The decrease in net loss for the period was primarily due to increased Digital Marketing revenue from the prior year and reduced employee and SG&A expenses.
Cash and cash equivalents totaled $756 at March 31, 2023, as compared to $0.1 million at December 31, 2022. Subsequent to the quarter’s closing, in April 2023, the Company received a $5.0 million equity investment from Hexagon Partners.
John C. Small, Chief Financial Officer of AiAdvertising, added, “As of July 18, 2023, we believe that our existing cash, together with the recent strategic investment of $5.0 million from Hexagon Partners, the $0.8 million in short term receivables, and $9.2 million that currently remains available under our $10.0 million Equity Line of Credit with GHS Investments LLC (“GHS”), will be sufficient to meet our anticipated capital requirements to fund planned operations.”
About AiAdvertising
AiAdvertising, Inc. (OTC: AIAD) is a next-generation AdTech company that is harnessing the power of artificial intelligence (AI) and machine learning (ML) to build software for today’s marketing leaders. We are focused on eliminating waste and maximizing the return on digital ad spend.
Our flagship product, the Campaign Performance Platform, is a subscription-based, end-to-end Ad Management solution. The platform empowers brands and agencies to easily target, predict, create, scale, and measure hyper-personalized campaigns.
For more information about the Company, please visit www.AiAdvertising.com or our LinkedIn or Twitter pages.
Forward-Looking Statements
This press release may contain “forward-looking statements.” Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are included in our filings with the Securities and Exchange Commission, including the “Risk Factors” section of our annual report on Form 10-K for the year ended December 31, 2022. Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise, except as may be required under applicable law.
AIADVERTISING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
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March 31, 2023 |
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December 31, 2022 |
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(unaudited) |
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||||
ASSETS |
|
|
|
|
||||
CURRENT ASSETS |
|
|
|
|
||||
Cash |
|
$ |
756 |
|
|
$ |
55,831 |
|
Accounts receivable, net |
|
|
880,069 |
|
|
|
95,300 |
|
Prepaid and other current Assets |
|
|
94,000 |
|
|
|
105,076 |
|
TOTAL CURRENT ASSETS |
|
|
974,825 |
|
|
|
256,207 |
|
|
|
|
|
|
|
|
||
PROPERTY & EQUIPMENT, net |
|
|
94,609 |
|
|
|
102,659 |
|
RIGHT-OF-USE ASSETS |
|
|
169,319 |
|
|
|
175,974 |
|
|
|
|
|
|
|
|
||
OTHER ASSETS |
|
|
|
|
|
|
||
Lease deposit |
|
|
8,939 |
|
|
|
8,939 |
|
Goodwill and other intangible assets, net |
|
|
20,202 |
|
|
|
20,202 |
|
TOTAL OTHER ASSETS |
|
|
29,141 |
|
|
|
29,141 |
|
|
|
|
|
|
|
|
||
TOTAL ASSETS |
|
$ |
1,267,894 |
|
|
$ |
563,981 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) |
|
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|
|
||
|
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|
|
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CURRENT LIABILITIES |
|
|
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|
|
|
||
Accounts payable |
|
$ |
2,036,408 |
|
|
$ |
2,071,122 |
|
Accounts payable, related party |
|
|
10,817 |
|
|
|
10,817 |
|
Accrued expenses |
|
|
156,548 |
|
|
|
39,233 |
|
Operating lease liability |
|
|
29,717 |
|
|
|
28,494 |
|
Lines of credit |
|
|
- |
|
|
|
- |
|
Deferred revenue and customer deposit |
|
|
1,284,219 |
|
|
|
791,133 |
|
Convertible notes and interest payable, current, net |
|
|
- |
|
|
|
- |
|
Notes payable |
|
|
- |
|
|
|
- |
|
Notes payable, related parties |
|
|
- |
|
|
|
- |
|
TOTAL CURRENT LIABILITIES |
|
|
3,517,709 |
|
|
|
2,940,799 |
|
|
|
|
|
|
|
|
||
LONG TERM LIABILITIES |
|
|
|
|
|
|
||
Capital lease obligation, long term |
|
|
139,602 |
|
|
|
147,480 |
|
TOTAL LONG TERM LIABILITIES |
|
|
139,602 |
|
|
|
147,480 |
|
|
|
|
|
|
|
|
||
TOTAL LIABILITIES |
|
|
3,657,311 |
|
|
|
3,088,279 |
|
COMMITMENTS AND CONTINGENCIES (see Note 10) |
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||
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||
SHAREHOLDERS’ EQUITY (DEFICIT) |
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|
||
Preferred stock, $0.001 par value; 5,000,000 Authorized shares: |
|
|
|
|
|
|
||
Series A Preferred stock; 10,000 authorized, zero and 10,000 shares issued and outstanding; |
|
|
- |
|
|
|
- |
|
Series B Preferred stock; 25,000 authorized, 18,025 shares issued and outstanding; |
|
|
18 |
|
|
|
18 |
|
Series C Preferred stock; 25,000 authorized, 14,425 shares issued and outstanding; |
|
|
14 |
|
|
|
14 |
|
Series D Preferred stock; 90,000 authorized, 86,021 and 90,000 shares issued and outstanding; |
|
|
86 |
|
|
|
86 |
|
Series E Preferred stock; 10,000 authorized, 10,000 shares issued and outstanding; |
|
|
10 |
|
|
|
10 |
|
Series F Preferred stock; 800,000 authorized, zero and 2,413 shares issued and outstanding; |
|
|
- |
|
|
|
- |
|
Series G Preferred stock; 2,600 authorized, 2,597 shares issued and outstanding; |
|
|
3 |
|
|
|
3 |
|
Series H Preferred stock; 1,000 authorized, zero and zero shares issued and outstanding; |
|
|
- |
|
|
|
- |
|
Common stock, $0.001 par value; 10,000,000,000 and 2,000,000,000 authorized shares; 1,315,856,715 and 1,175,324,203 shares issued and outstanding, respectively |
|
|
1,315,863 |
|
|
|
1,175,330 |
|
Additional paid in capital |
|
|
50,473,550 |
|
|
|
49,595,914 |
|
Common stock payable, consisting of 5,000,000 shares valued at $0.1128 |
|
|
564,000 |
|
|
|
564,000 |
|
Accumulated deficit |
|
|
(54,742,961 |
) |
|
|
(53,859,673 |
) |
TOTAL SHAREHOLDERS’ EQUITY (DEFICIT) |
|
|
(2,389,417 |
) |
|
|
(2,524,298 |
) |
|
|
|
|
|
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) |
|
$ |
1,267,894 |
|
|
$ |
563,981 |
|
AIADVERTISING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
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|
|
Three Months Ended |
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|
|
March 31, 2023 |
|
March 31, 2022 |
||||
|
|
|
|
|
||||
REVENUE |
|
$ |
2,174,752 |
|
|
|
1,199,662 |
|
COST OF REVENUE |
|
|
1,655,449 |
|
|
|
1,535,832 |
|
Gross Profit |
|
|
519,303 |
|
|
|
(336,170 |
) |
|
|
|
|
|
|
|
||
OPERATING EXPENSES |
|
|
|
|
|
|
||
Salaries and outside services |
|
|
671,261 |
|
|
|
1,264,705 |
|
Selling, general and administrative expenses |
|
|
723,285 |
|
|
|
1,014,564 |
|
Depreciation and amortization |
|
|
8,050 |
|
|
|
9,113 |
|
TOTAL OPERATING (INCOME) EXPENSES |
|
|
1,402,596 |
|
|
|
2,288,382 |
|
|
|
|
|
|
|
|
||
INCOME (LOSS) FROM OPERATIONS BEFORE OTHER INCOME AND TAXES |
|
$ |
(883,293 |
) |
|
|
(2,624,552 |
) |
|
|
|
|
|
|
|
||
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
||
Other expense |
|
|
(5 |
) |
|
|
- |
|
Gain (loss) on Sales of Discontinued Operations |
|
|
- |
|
|
|
(25,197 |
) |
TOTAL OTHER INCOME (EXPENSE) |
|
$ |
(5 |
) |
|
|
(25,197 |
) |
|
|
|
|
|
|
|
||
INCOME/(LOSS) FROM OPERATIONS BEFORE PROVISION FOR TAXES |
|
$ |
(883,288 |
) |
|
|
(2,599,355 |
) |
|
|
|
|
|
|
|
||
PROVISION (BENEFIT) FOR INCOME TAXES |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||
NET INCOME/(LOSS) |
|
$ |
(883,288 |
) |
|
|
(2,599,355 |
) |
|
|
|
|
|
|
|
||
PREFERRED DIVIDENDS |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
||
NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS |
|
$ |
(883,288 |
) |
|
|
(2,599,355 |
) |
|
|
|
|
|
|
|
||
NET LOSS PER SHARE |
|
|
|
|
|
|
||
BASIC |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
DILUTED |
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
|
|
|
|
|
|
||
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
|
|
||
BASIC |
|
|
1,231,401,433 |
|
|
|
1,057,633,026 |
|
DILUTED |
|
|
1,231,401,433 |
|
|
|
1,057,633,026 |
|
AIADVERTISING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
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|
|
Three Months
|
|
Three Months
|
||||
|
|
March 31,
|
|
March 31,
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
||||
Net income (loss) from continued operations |
|
$ |
(883,288 |
) |
|
$ |
(2,599,355 |
) |
|
|
|
|
|
|
|
||
Adjustment to reconcile net loss to net cash (used in) operating activities |
|
|
|
|
|
|
||
Bad debt expense |
|
|
- |
|
|
|
(1,150 |
) |
Depreciation and amortization |
|
|
8,050 |
|
|
|
9,113 |
|
Gain on Sale of Discontinued Operations |
|
|
- |
|
|
|
(25,197 |
) |
Non-cash compensation expense |
|
|
462,163 |
|
|
|
393,546 |
|
Change in assets and liabilities: |
|
|
|
|
|
|
||
(Increase) Decrease in: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(784,769 |
) |
|
|
141,514 |
|
Prepaid expenses and other assets |
|
|
11,076 |
|
|
|
33,152 |
|
Costs in excess of billings |
|
|
- |
|
|
|
16,638 |
|
Accounts payable |
|
|
(34,714 |
) |
|
|
409,699 |
|
Accrued expenses |
|
|
117,315 |
|
|
|
18,565 |
|
Customer Deposits |
|
|
493,086 |
|
|
|
(3,490 |
) |
|
|
|
|
|
|
|
||
NET CASH (USED IN) OPERATING ACTIVITIES |
|
|
(611,081 |
) |
|
|
(1,606,965 |
) |
|
|
|
|
|
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
Cash paid for purchase of fixed assets |
|
|
- |
|
|
|
(9,570 |
) |
Proceeds from the sale of discontinued operations |
|
|
- |
|
|
|
25,197 |
|
NET CASH (USED IN)/PROVIDED BY INVESTING ACTIVITIES |
|
|
- |
|
|
|
15,627 |
|
|
|
|
|
|
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Proceeds of issuance of common stock, net |
|
|
556,006 |
|
|
|
643,624 |
|
|
|
|
|
|
|
|
||
NET CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES |
|
|
556,006 |
|
|
|
643,624 |
|
|
|
|
|
|
|
|
||
NET INCREASE / (DECREASE) IN CASH |
|
|
(55,075 |
) |
|
|
(947,714 |
) |
|
|
|
|
|
|
|
||
CASH, BEGINNING OF PERIOD |
|
|
55,831 |
|
|
|
3,431,455 |
|
|
|
|
|
|
|
|
||
CASH, END OF PERIOD |
|
$ |
756 |
|
|
$ |
2,483,741 |
|
|
|
|
|
|
|
|
||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
|
|
|
|
|
|
||
Interest paid |
|
$ |
- |
|
|
$ |
- |
|
Taxes paid |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
||
Non-cash financing activities: |
|
|
|
|
|
|
||
Right of Use Assets |
|
$ |
- |
|
|
|
27,972 |
|
Exercise of stock options |
|
$ |
- |
|
|
$ |
912 |
|
